Exhibit 10.50
EMPLOYMENT AGREEMENT
The Employment Agreement by and between Chugach Electric Association (Chugach)
and Eugene N. Bjornstad (Bjornstad) dated June 22, 1994 and which was extended
until October 23, 2001 is terminated upon the signing of this new Agreement.
This Agreement is made and entered into this 22nd day of August, 2001, by and
between Chugach Electric Association, Inc. ("Chugach") and Eugene N. Bjornstad
("Bjornstad"). The term of this Agreement will be from August 22, 2001, through
October 24, 2002.
WHEREAS, Bjornstad has been employed by Chugach for eighteen years in a number
of capacities, most recently as General Manager, and
WHEREAS, Chugach desires to retain Bjornstad as General Manager because of his
qualifications and experience, and confirm in writing the heretofore mutual,
verbal agreement between the parties, as well as confirm his continuing
employment as General Manager by a motion of the Board of Directors of Chugach
("Board") approved at its duly held Board meeting on August 22, 2001.
For the reasons set forth above, and in consideration of the mutual covenants
and promises of the parties hereto, Chugach and Bjornstad agree as follows:
1. Duties and Compensation
a. Chugach hereby employs Bjornstad as the General Manager of Chugach
with the powers, duties, and responsibilities as provided in Appendix A -- Board
Policy 106, Delegations of Authority from the Board of Directors to the General
Manager; Appendix B -- Board Policy 107, Board of Directors -- General Manager
Relationship; Appendix C -- Board Policy 118, Delegation of Certain of the
Secretary's and Treasurer's Duties to the General Manager, and in other Chugach
policies and procedures and such other powers, duties, and responsibilities as
the Board shall from time to time determine.
b. Upon approval of this Agreement by the Chugach Board of Directors,
Chugach shall pay Bjornstad $15,000 by check.
c. Chugach shall pay Bjornstad an annual salary of $175,000 effective
July 18, 2001 to October 24, 2002.
d. Prior to the commencement of each contract year so long as this
contract is in effect, the Board will annually set performance goals to
establish a basis for additional forms of compensation for Bjornstad from time
to time, including but not limited to incentive bonuses, GAINS Program,
performance bonuses, and/or additional benefit packages, as shall be mutually
agreed between the Board and Bjornstad. Such additional forms of compensation
shall be agreed upon in writing and shall be in addition to the salary described
in paragraph 1 .c. above.
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e. Bjornstad shall be entitled to participate in or otherwise be a
party to all Chugach benefit and leave programs applicable to salaried
administrative personnel and shall continue to participate in all such programs
in the same manner and extent to which he is currently participating except as
provided in paragraph 1.g. below.
f. Bjornstad shall be assigned an unmarked, radio-equipped company
vehicle which may be used for both personal and business purposes within Alaska.
Bjornstad shall maintain and keep a daily log of his personal and business use
of said vehicle as required by law.
g. Bjornstad shall earn paid annual leave at a rate of twelve (12)
hours per pay period. Accrued annual leave may be cashed in at any time at the
sole discretion of Bjornstad. Bjornstad is required to use at least four weeks
of annual leave per year and cannot accrue any more than four weeks additional
annual leave to his existing leave balance.
h. Bjornstad covenants and agrees that he will devote his full time and
attention to the duties of General Manager. Bjornstad further agrees that he
will not engage in any other form of work or business which requires his time
without prior written consent of the Board. Bjornstad also agrees that he will
not participate in any political activity which would reflect upon Chugach
without prior consent of the Board.
2. Term
a. The term of this Agreement shall be from August 22, 2001, to October
24, 2002. This Agreement may be extended for additional terms of one or more
years thereafter sixty days or more prior to expiration of the then remaining
term. This Agreement will automatically be extended for one year periods if the
Board does not take formal action otherwise on or before a date sixty days prior
to the then termination date or unless terminated as provided in paragraph 3
below.
3. Termination
a. It is agreed that it is to the mutual benefit of Chugach and
Bjornstad to enter into this Agreement, and that this Agreement shall not be
terminated except as follows:
1. Termination for Cause. For purposes of this Agreement,
Bjornstad's termination shall be deemed to have been made for
cause only under the following circumstances:
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(a) The termination is as a result of an act of dishonesty or
moral turpitude on the part of Bjornstad constituting a
felony.
(b) In the event a majority of the entire Board, acting in good
faith and upon the information then known to Chugach,
determines that Bjornstad knowingly and willfully violated
any State or Federal law which would or does injure the
business or reputation of Chugach and/or which has or would
seriously impair his ability to perform his duties and
responsibilities as General Manager;
(c) Bjornstad has, willfully and in bad faith, refused or
neglected to carry out the specific reasonable duties or
instructions which may have been assigned to him by the
Board and such refusal shall continue after written notice
authorized by a vote of a majority of the entire Board to
Bjornstad and a period of ten (10) days in which time
Bjornstad shall have the opportunity to cure such failure.
In the event of the occurrence of any or all of the foregoing
paragraphs 3.a.l. (a), (b), or (c), Chugach may terminate this
Agreement by giving written notice authorized by a vote of a
majority of the entire Board to Bjornstad not later than thirty
(30) days following the event, transaction, or occurrence giving
rise to such right of termination or, if later, thirty (30) days
after Chugach first discovers that such event, transaction, or
occurrence has taken place.
2. Voluntary Termination. Unless otherwise mutually agreed between
the parties, Bjornstad shall give Chugach a minimum of sixty (60)
days written notice should he elect to terminate his employment
as General Manager under this Agreement. Bjornstad shall receive
any salary due as of the effective date of voluntary termination
plus any accrued annual leave.
3. Mutual Agreement of the Parties. This Agreement may be terminated
by mutual agreement of the parties.
4. Disability. Chugach may terminate Bjornstad's employment after
having established Bjornstad's Disability, subject to applicable
state or Federal law. For purposes of this Agreement,
"Disability" means a physical or mental disability which impairs
Bjornstad's ability to substantially perform his duties under
this Agreement and which results in Bjornstad becoming eligible
for long-term disability benefits under Chugach's long-term
disability plan (or, if Chugach has no such plan in effect, which
impairs Bjornstad's ability to substantially perform his duties
under this Agreement for a period of 180 consecutive days).
Bjornstad shall be entitled to the compensation and benefits
provided for under this Agreement for (i) any period during the
term of this Agreement and prior to the establishment of
Bjornstad's Disability during which Bjornstad is unable to work
due to a physical or mental disability, or (ii) any period of
Disability which is prior to Bjornstad's termination of
employment pursuant to this paragraph.
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5. Death. This Agreement shall terminate on the date of Bjornstad's
death.
b. If Chugach terminates this Agreement for cause pursuant to
paragraphs 3.a.1 .(a), (b), or (c) above, Bjornstad shall not be entitled to any
further payments after the effective date of such termination except those which
were due Bjornstad on the effective date of termination.
c. If Chugach terminates this Agreement for any reason other than as
provided in paragraphs 3.a.l.(a), 3.a.1.(b), 3.a.1.(c), 3.a.2., 3.a.3., 3.a.4.,
or 3.a.5. above, Chugach shall pay Bjornstad, as severance pay an amount equal
to six months of Bjornstad's annual salary, plus any accrued annual leave and
any bonuses or other compensation then due as of the effective date of the
notice of termination.
4. Binding Effect
This Agreement shall be binding upon and inure to the benefit of any successor
of Chugach, and any such successor shall be deemed substituted for Chugach under
the terms of this Agreement for all purposes. As used herein, "successor" shall
include any person, firm, corporation, or other business entity which at any
time, whether by purchase, merger, consolidation, or otherwise, directly or
indirectly acquires all or substantially all the assets or business of Chugach.
Chugach will require any successor to expressly assume and perform this
Agreement.
5. Notices
Any notice required or desired to be given pursuant to this Agreement shall be
in writing and mailed by certified mail, return receipt requested, or by hand
delivery, with receipt personally acknowledged, to the parties at the following
addresses:
Chugach: President, Board of Directors
Chugach Electric Association, Inc.
P.O. Box 196300
Anchorage, Alaska 99519-6300
Bjornstad: P.O. Box 729
Girdwood, Alaska 99587
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6. Entire Agreement
This Agreement contains the entire understanding between the parties and may
only be modified by an agreement in writing signed by both parties.
7. Assignment
This Agreement shall not be assigned in whole or in part by Bjornstad to any
other person, business, or entity and any attempt to do so shall be void ab
initio. No person, business, or entity shall have any interest in the terms,
conditions, wages, or benefits provided under this Agreement in the event of
Bjornstad's death or disability except as may be specifically provided by said
benefit.
8. Applicable Law and Venue
This Agreement shall be governed by and construed under the laws of the State of
Alaska. Venue for any litigation or arbitration under this Agreement shall be in
the Third Judicial District, Anchorage, Alaska.
CHUGACH ELECTRIC ASSOCIATION, INC.
By: /s/ Bruce E. Davison Date: August 22, 2001
Bruce E. Davison
President, Board of Directors
By: /s/ Eugene N. Bjornstad Date: August 22, 2001
Eugene N. Bjornstad
General Manager
ATTACHMENT: Exhibit 1 -- 2001-2002 Goals
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EXHIBIT 1
2001-2002 GOALS
1. Implement a Leadership Plan
2. Rate Case Finalized
3. Establish a Disaster and Emergency Plan
4. Keep MFI/I above 1.25
5. Update Business Plan
6. Establish Fuel Supply Strategy
7. Capital Credits Plan Established
8. Establish a Labor Relations Strategy
9. Identify new sources of Revenue
10. Carry out Refinancing